Self Employed
1035 Points
Joined December 2008
| Originally posted by :shruti |
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Do any of the provisions under Sec 198, 268, 309(1) and Scedule XIII of Companies relating to remuneration to Directors applicable for Pvt Ltd company having no profits or inadequate profits.
A pvt Ltd co. has one whole time director and one Managing Director both withdrawing a monthly salary. The co has incurred loss in the year 2008-09 (taking into account the salary paid). The two directors are also the shareholders of the company.
Will the provision of the above referred sections applicable (11% of the net profits) |
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None of the provisions referred to above are applicable to a Private Limited Company. In other words those provisions you have quoted are applicable only to a Public Limited Company. A private limited company if authorised by its Articles of Association can pay remuneration to its directors (there is no ceiling), whole time directors and managing directors. Approval of the Board is required to be obtained.
In respect of appointment of a Director as Whole Time Director and payment of remuneration, the private limited company is required to file Form 32 (for change of designation) with ROC within 30 days from the date of approval of the Board.
In respect of appointment of a Director as Managing Director and payment of remuneration, the private limited company is required to file Form 32 and Form 23 (Section 192) with ROC within 30 days from the date of approval of the Board.
There is no requirement to obtain approval of the Members or Central Government.
with regards
Muralidharan
CAclubindia
